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Sustainable Finance Live 2023: UK Infrastructure Bank to play a key role in HS2 replacement

Sustainable Finance Live 2023: UK Infrastructure Bank to play a key role in HS2 replacement

“We expect to play a very meaningful role in making sure projects get delivered,” said John Flint, chief executive, UK Infrastructure Bank, regarding the role the bank will have in the HS2 replacement plans in the North of England.

Flint gave his afternoon keynote at the Sustainable Finance Live 2023 conference, and stated that he would not comment on the decision to stop HS2 but said, “we now understand there’s up to £30 billion of transport projects that are likely to get funded in the north of England, often via local authorities that we’re developing our advisory relationships with.”

He added: “Our sandbox has gotten a little bit bigger so there’s a bit more for us to be doing.”

Flint also summed up the mandate of the UK Infrastructure Bank and said: “We're two years old, we were set up by HM Treasury. We only have one shareholder. We have no regulators, and we have no competitors. We've been given 22 billion pounds of public money to deploy to build infrastructure that will get the country to net zero or for regional and local economic growth.”

Flint went on to debunk the myth that “we’re all going to get rich out of climate transition." He argued: “We have to decommission a no longer fit for purpose high carbon industrial economy, and someone’s going to have to pay for it. Today, the governments are socialising that cost on behalf of all of us in most countries. That’s only going to get us so far. The private sector at some point is going to have to wake up to a new world of return and risk expectation.”

He encouraged the audience to think about risk appetite. Flint added that in their daily operations private sector actors tell them they are keen to finance projects, but are asking the UK Infrastructure Bank to de-risk it for them or help them reach their minimum returns. He also said that “we will be doing some of that, but I’d like us all to think a little bit more deeply about how far that’s going to get us because frankly, it’s not going to get us very far. We’ve got 22 billion capacity, we will spend that very quickly, and we will still have many hundreds of billions of infrastructure investment required in the UK.”

Flint further stated: “I’m hoping that what we’ll be able to do over the next two or three years is move that conversation on a little, to a conversation that’s a bit more advanced around meeting each other in the middle. We can’t indefinitely de-risk the private sector.”

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